There are lots of things we all do in our lives that have unintended consequences.
If I drink too much, I may really enjoy myself on my night out, but it increases the chances of me falling asleep and missing my stop on the way home. I’ve never done this, honestly, (I’ve done some very silly things on and off of trains, but I’ve never done that), but I know people that have!
I know of a law firm that was so busy doing the work, they never got round to raising invoices on a regular basis. They thought they were doing really well, because all the staff were flat out, but no one was actually running the business, and eventually they ran out of money and went under. It happens more often than you’d think and can be a consequence of being too busy to see what is really going on in your business.
Or what about people who do things to save tax, without thinking about what happens if their circumstances change.
Take, for example, people who put assets into trust to avoid inheritance tax, but then run out of money and can’t get their assets back, because once you’ve put them into trust, they are not yours any more.
Or, perhaps, people who transfer assets to their children for the same reason, but then realise that if their son or daughter subsequently goes through a divorce, they could suddenly find that their ex daughter or son in law has a claim over the family property even though they’ve never lived in it or had any real interest in it.
The reality is that you never know what the future holds, and in solving or trying to solve one problem, you might accidentally create another one that you hadn’t expected.
If you’re going to transfer assets into a trust or the names of others, speak to an expert before you do it to talk through all the possible consequences as you could easily find out that you spend money on avoiding one liability, only to create one even bigger than my bar bill!
Kleyman & Co Solicitors. The full service law firm. Intentional all round strategies.